The Ties That Bind

Although they are close trade partners, the UK and Singapore are linked by more than economic ties. In fact, it may be the cultivation of areas beyond businesses that will take this relationship to the next stage. 

By Rhoda Severino, Senior Associate, Cicero Group

This year is not only the 60th anniversary of the British Chamber of Commerce in Singapore, it also marks the 195th anniversary of the founding of modern Singapore as a British port on the Straits of Malacca by the then governorgeneral of Bencoolen, Sir Stamford Raffles. Just a few years after his arrival, he marvelled that “the active spirit of enterprise which prevails is truly astonishing, and for its extent, I believe I may safely say, that no part of the world exhibits a busier scene than the town and environs of Singapore.”
Sir Stamford Raffles’ words still describe Singapore remarkably well close to 200 years after he wrote them as the trade relationship between the United Kingdom and Singapore has only flourished since the 19th century.
From serving as a British-controlled entrepôt for tin, rubber and labour, Singapore has transformed itself into one of the major financial and shipping capitals of the world. It is a S$9 billion export market for the UK, larger than even much bigger countries such as Australia and Turkey. Total trade value between the two countries has increased by nearly 60% over the past 10 years alone.
Singapore today is home to more than 30,000 British nationals and 700 British companies. Some UK-based firms are also some of the largest employers in Singapore. The UK has even contributed to the Singapore skyline, with British architects and engineering firms playing a leading role in the construction of the now iconic Marina Bay Sands, Singapore Sports Hub and Gardens by the Bay. In terms of foreign direct investment, the UK is second only to China as the largest recipient of Singapore’s outward investment. The people-to-people partnership is strong too, with thousands of Singaporeans living, working and studying in the UK. The most recent Singapore Day event hosted in London’s Victoria Park was attended by Prime Minister Lee Hsien Loong and attracted a crowd of more than 9,000.
Just as the UK is Singapore’s largest EU trading partner, Singapore is the UK’s largest trading partner in Southeast Asia, and the first ASEAN member to begin and conclude negotiations with the EU for a bilateral free trade agreement. As the deadline for the formation of the ASEAN Economic Community approaches, Singapore’s position as a global and regional hub for trade and investment will only become more significant, which the UK has recognised. Singapore is the gateway for the rapidly growing Southeast Asian region not only for the UK, but also for many other countries, and is a driving force for further trade integration and liberalisation in ASEAN.
That the relationship extends far beyond the economic sphere is testament to the strength and long history of UK-Singapore ties. More than 50,000 international and Singapore resident students are studying for a UK higher education qualification in Singapore through distance learning and global campuses of British institutions, the second largest cohort in the world after Malaysia’s. And every year, thousands of Singaporean students go to the UK to pursue higher education; in fact, many in the highest ranks of Singapore government, business and academia received their training in the UK.
These are rich links that can be cultivated further as the UK turns eastward in its foreign and trade policies. Foreign Secretary William Hague, in a 2012 Fullerton lecture in Singapore organised by the London-headquartered International Institute for Strategic Studies, has categorically stated that “long-term engagement with Asia is not an option for us; it is an imperative.”
Prime Minister Lee, in his most recent visit to London earlier this year, drew many parallels between London and Singapore and their journey to becoming global financial powerhouses: both embraced cosmopolitanism, opening themselves to trade, investment and talent; both successfully identified emerging opportunities abroad, integrating themselves more closely with their respective regions and the global economy at large; and both placed themselves on the cutting edge of innovation, adopting new technologies and new approaches ahead of their competitors.
London has a longer heritage as a global capital for trade and finance, and Singapore examined its experience closely as the city-state began to build itself up as a financial centre for the Asia Pacific. But both cities and countries have much to learn from each other now as they face similar challenges both now and likely in the future. Like the European Union before them, ASEAN member states are attempting to forge a single market while being wary of the pitfalls and unintended consequences that have so far emerged from the European project. As the UK wrestles with difficult questions of national identity, exemplified by the rise of the UK Independence Party and the movement for Scottish independence, Singapore, too, is reflecting on what it means to be Singaporean as the nation approaches its 50th birthday next year. Neither country is exempted from the fierce debate on the widening gap between the rich and the poor that swept the world in the aftermath of the global financial crisis.
Sir Stamford Raffles displayed remarkable foresight nearly two centuries ago when he called Singapore “the emporium and pride of the East,” and urged leaders and administrators of the time to cultivate it. An enduring strong partnership will remain essential in the continuing growth and development of Singapore and the UK, particularly in the face of challenges both old and new. As international trade linkages multiply all over the world, few will have the advantage of a relationship as old and as deep as the one between Singapore and the UK, the benefits of which both countries should continue to develop to their fullest potential.